Also read: What’s going on at Goodman?

by Jeff Sanford01 Oct 2014

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Also read: What’s going on at Goodman?

The news came in a short press release distributed September 4th, 2014: Jonathan Goodman, son of the firm’s founder was stepping down from the board of directors and resigning his positions as CEO of Dundee Capital Markets.

According to the press release, “I am a significant shareholder in the company and I fully support management on its new initiatives which have afforded me the opportunity to pursue opportunities outside the company.” So everything is fine according to the son. Investors in Goodman stock need not worry.

But is there a deeper story here?

Dundee has long been the picture of a successful Canadian independent finance organization. The company is one of the major independents in this country. The firm, founded by patriarch, Ned Goodman, has long helped many mining and resource firms. The Goodman trail of companies is extensive. In 2011 the mutual fund company the family-firm founded and created was sold for over $2 billion to Scotia in 2011. The Goodman family is one of the most respected business families in the country.

Since the sale of Dynamic the Goodman family has been gone on to other things. There are investments in organic beef. A massive real estate portfolio was sold off in 2013. But business has been a bit dodgy. The valuations of private assets recently plunged, resulted in a $40-million lose at the company. Maybe it was time for a strategic reassessment.

Is it time to get back in wealth management? Goodman has been prevented from playing in the sector as a result of non-compete agreements. But those agreements are coming off. Is the firm getting ready to get back into the sector? Such a move would make sense.

Wealth management is, of course, all the rage these days. The baby boomers are retiring. There are trillions about to be passed from the post-war generation to the kids. This is going to be one of the basic wealth trends of the decade to come. CIBC recently reoriented the entire company toward wealth management with accession of Victor Dodig to CEO. Goodman is, apparently, considering a similar shift. According to the newspaper of record in this country, the Globe and Mail, “there is a new strategic direction opening up at the company…”The man who sold his big mutual fund company to Bank of Nova Scotia wants to get back into the wealth management game….David Goodman, son of Ned Goodman and former chief executive of DundeeWealth Inc., is setting out to build a brand new asset manager, marking his first major foray since selling his former company to Scotiabank for $2.3-billion in.”

To facilitate this strategic shift, this past summer, family patriarch Ned Goodman, stepped out of the way, is now chairman and controlling shareholder, leaving room for David to become CEO at Dundee Corp., the central org of the family group. The other son, Jonathan, seemed to be cut out of the familial succession plan.

Industry news

The advisory industry is experiencing stable levels of profitability and continues to grow but at a rate slower than five years ago. This slowing will require changes in how firms are managed in order to build their bottom line